What is a caveat?
Generally, a caveat’s purpose is to advise prospective buyers that a third party (a caveator) might have legal interests in the property. Without the caveator’s consent, the owner should not enter into any transactions concerning a transfer of the interest in the property.
A caveat can be lodged and withdrawn online or at Land Use Victoria. To lodge or withdraw a caveat online, you will need the help of a lawyer or a licensed conveyancer with a Property Exchange Australia Ltd. (PEXA) subscription.
How do you know if you have a caveat on your property?
If you want to check for a caveat on a property, you need to conduct a title search either with the help of a property lawyer or by subscribing on the LANDATA website.
How long does a caveat last in Victoria?
A caveat will remain on the title until it is withdrawn by the caveator or forcibly removed by the property owner.
How to remove a caveat on your property
In Victoria, generally, there are 3 ways for a property owner to remove a caveat.
- by consent;
- through a section 89A application; or
- forcibly through a section 90(3) application
Where the person claiming to hold the registerable interest (“caveator”) agrees to remove the caveat voluntarily, a withdrawal of Caveat can be made electronically through PEXA – an electronic platform used to deal with Property.
Where a person does not hold a caveatable interest and does not consent to their caveat being removed, there are alternative methods in which you may remove their caveat under the Transfer of Land Act 1958 (Vic) (the Act).
1. Section 89A – Lapsing Notices – Generally Non-Urgent Removal
A cost-effective method for removing a caveat in Victoria is by way of an application pursuant to section 89A of the Act.1 Under this provision, an application is made by the registered proprietor of the property to the Registrar of Titles supported by a solicitor’s certificate, to say that the caveator does not hold an interest claimed by him/her.2
The Registrar of Titles is required to send notice to the caveator, notifying them of the application and giving them a specified period, no less than 30 days. Upon receiving this notice, the caveator really only holds 2 options:
- To ignore it in which the caveat will lapse (Registrar will make necessary amendments to the title register); or
- to issue court proceedings to substantiate their caveatable interest.3
2. Section 90 – Urgent Application
A property owner who is affected by a caveat may bring a section 90(3) application in the Supreme Court.4
A simple example is where you have entered into a Contract of sale to sell your property and in between the time you entered into the contract of sale and settlement, someone puts a caveat on your title. The caveat may impede on the settlement date, or worse, cause the purchaser to walk away.
In this application, it is the caveator who bears the burden of showing that his or her caveat, on the balance of convenience, justifies it being registered over the Property in the particular circumstance.
A section 90 application has the potential to be quicker, as urgent applications can be listed and heard within a short period of time.
Which caveat removal method is appropriate turns on each individual matter’s circumstances. Whilst an application to the Registrar of Titles may be a more cost-effective solution (if the caveator does not hold a caveatable interest), it is not appropriate in many situations due to the urgency of the matter or the particular circumstance. Alternatively, a section 90 application is usually dealt with expediently and often on an urgent basis.
Let our highly skilled team at TNS Lawyers help advise you on the right solution to suit your needs.
1 Transfer of Land Act 1958 (Vic) s89A.
2 Transfer of Land Act 1958 (Vic) s89A(2).
3 Transfer of Land Act 1958 (Vic) s89A(3).
4 Transfer of Land Act 1958 (Vic) s90A(3).